Board president: Fresno Unified steering clear of leaseback contracts

A Harris Construction sign is shown outside the construction office where Fresno Unified’s new Gaston Middle School was built in west Fresno.
A Harris Construction sign is shown outside the construction office where Fresno Unified’s new Gaston Middle School was built in west Fresno. Fresno Bee Staff Photo

In the seven months since an appellate court raised questions about Fresno Unified’s use of a no-bid contract, district officials have contended repeatedly that the alternative to the traditional bidding process broke no laws. But the district hasn’t touched controversial leaseback contracts since the court decision – reverting to the traditional bidding process for recent school construction projects.

On Thursday, the day after trustees approved a $2.5 million, low-bid contract to replace classrooms at Baird Middle School, Board President Luis Chavez made it clear that leaseback contracts are on hold, at least for now.

“There will be no lease-leaseback contracts on the agenda while I’m president,” said Chavez, who was named board president last month. “We will stick to the traditional, lowest-bid contracting process until we get clarity from the court about what’s allowed and what’s not allowed. I’m firm on that.”

The 5th District Court of Appeal in June cast doubt on a multimillion-dollar leaseback contract the Fresno Unified School District signed with Harris Construction to build Gaston Middle School. In August, the state Supreme Court refused Fresno Unified’s request to reconsider the appellate court decision, which means Fresno contractor Stephen Davis – who took the district to court – can move forward with his accusations that district leaders misused the leaseback process.

There will be no lease-leaseback contracts on the agenda while I’m president.

Fresno Unified Board President Luis Chavez

Meanwhile, a federal investigation is probing Fresno Unified’s leaseback contracts with Harris Construction and Bush Construction firms, and the relationship between school leaders and contractors.

A leaseback contract allows schools to avoid the traditional bidding process and hand-pick a contractor for a project. The method was originally intended for cash-strapped schools and allows school districts to pay back contractors for projects over time if they don’t have the money upfront.

Even though Fresno Unified had funding available, it signed 25 leaseback contracts from 2011 to 2014 – the bulk of which went to Harris Construction. But there’s been no sign of the controversial financing method in recent months, and none of the projects approved in the past year have been awarded to the Harris or Bush firms.

Fresno Unified isn’t the only district to back away from the leaseback process. Since Fresno Unified was taken to court, districts across the state that frequently used the no-bid process in the past, such as L.A. Unified, have stopped.

At a school board meeting Wednesday, trustees awarded the Baird Middle project to BVI Construction Inc. – which the meeting agenda noted was the “lowest responsive, responsible bidder.”

25FUSD leaseback contracts 2011-14

Notifications were sent by the district to 55 vendors and four construction trade publications, and the district received four responses.

Also at Wednesday’s school board meeting, trustees approved a new charter school despite concerns about financial stability. Aspen Public School plans to open this summer at 2811 Mariposa Ave.

The charter school plans to serve more than 300 students up to eighth grade and is being modeled after Valley Preparatory Academy Charter School, which has been in operation since 2004.

The board’s approval of the new school is good for only a year, instead of the traditional five-year approval, because of concerns about last-minute changes made to the school’s plans for grant funding.

Aspen’s focus will be on students in economically depressed areas; the school received support from more than 70 interested parents.

Mackenzie Mays: 559-441-6412, @MackenzieMays